Shares of SoundHound AI (SOUN) are up 7% in pre-market trading, adding to yesterday’s 12.63% gain. There was no company-specific news behind the move, but it appears to be driven by short squeeze speculation. The next major catalyst is the company’s Q1 2026 earnings in May. If the company shows continued revenue growth and improving margins, the bullish outlook becomes much stronger.
Meet Samuel – Your Personal Investing Prophet
- Start a conversation with TipRanks’ trusted, data-backed investment intelligence
- Ask Samuel about stocks, your portfolio, or the market and get instant, personalized insights in seconds
For context, a short squeeze happens when a stock suddenly moves higher, forcing traders who bet against it (short sellers) to buy shares to cut their losses. This buying pushes the price even higher.
Is a Short Squeeze Building in SOUN Stock?
The voice-AI company is one of the most heavily shorted tech stocks, with short interest estimated in the mid-30% range of its float. This means many investors are betting the stock will fall. However, high short interest can also set the stage for a short squeeze if sentiment suddenly turns positive.
Attention is now turning to the company’s upcoming Q1 2026 earnings in May. Investors are watching closely to see if strong results could trigger further momentum and potentially accelerate a squeeze. In the previous quarter, SoundHound AI reported revenue of $55.1 million, up 59% year over year, showing continued growth.
Looking ahead, SoundHound expects to operate as a high-margin business over time, targeting more than 70% gross margins and around 30% EBIT margins. While it has not provided formal profitability guidance, management has said the company is entering a new break-even phase after years of heavy investment. For fiscal 2026, SoundHound guided revenue between $225 million and $260 million, representing growth of 33% to 54%.
SOUN Stock Performance
SOUN stock has been one of the most volatile names on Wall Street. It often reacts quickly to changes in market sentiment, which is common for small-cap AI stocks.
Despite strong 2025 results, the stock lagged in February as investors remained cautious about losses, rising competition in AI, and whether strong growth could continue. The shares also came under pressure in March during a broader market sell-off driven by geopolitical tensions in the Middle East. More recently, the stock has bounced back as tech stocks recovered, with investors returning to growth-focused names.
Year-to-date, SOUN stock is down by 21.3%.
What Is the Price Target for SOUN?
According to TipRanks, SOUN stock has received a Strong Buy consensus rating, with four Buys and one Hold assigned in the last three months. The average SoundHound stock price target is $14.50, suggesting a potential upside of 84.71% from the current level.
